Family Business Transition Crucial to Economic Stability in the Middle East by HC1209130958

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									Family Business Transition Crucial to Economic Stability in
the Middle East


04 February 2008
INSEAD Seminar Highlights Challenges for Local Businesses

Abu Dhabi and Fontainebleau, France - The future success of major family-run businesses in the Gulf is
a prerequisite to the region's continuous emergence as a leading global commercial, tourism, financial
and trade center, according to INSEAD Professor Randel Carlock, the first Berghmans Lhoist Chaired
Professor in Entrepreneurial Leadership and founding Director of the Wendel International Centre for
Family Enterprise at INSEAD. Maintaining their success through a management and ownership
transition process however remains a challenge, he argues.

Addressing a very senior group of executives from the GCC's leading business conglomerates during a
one-day seminar co-organized by INSEAD Centre for Executive Education and Research in Abu Dhabi,
JPMorgan Private Bank and Young Presidents' Organization, INSEAD Professor Carlock said that the
challenge facing UAE and other home-grown regional businesses is to develop leaders and owners
from the family who are capable of adapting to changing social values, new technology, as well as
increased competition.

"Family enterprises will remain the pillars of the region's burgeoning economic outlook. Even on a global
level, family firms make up more than two out of three companies and employ more than 50 per cent of
the international manpower," said INSEAD Professor Carlock.

International studies have shown that seven out of ten family businesses fail to make the transition to
the second generation. And only one of ten makes it to the third generation. That's a 60 per cent failure
rate per generation.

"Most senior-generation family business leaders across the Middle East will tell you that their greatest
fear is that their children will not be prepared for the leadership responsibilities that a successful family
enterprise demands, or that family conflicts will arise that threaten harmony and ownership continuity.
Yet, the challenges that both current family leaders and the next generation face are not
insurmountable".

"Each Middle Eastern family business is unique; therefore, to develop the next generation successfully,
a family business needs to think about best processes, not best practices. Think about context and
content, and ask 'what is our family's vision for the business?' and 'how can the family contribute'? The
answers are crucial to understanding the next generation's developmental needs," said Carlock.

Steve Klemme, managing director and head of JPMorgan Private Bank in the Middle East said "This
was a very strategic seminar that responded to challenges that family-run businesses face in the
stewardship and transfer of wealth. We have a very strong focus on family and entrepreneurial wealth
and regularly support and guide our clients in this respect. Today's event was a valuable opportunity for
family businesses in the region to get more insight into how to sustain their businesses and maintain
their performance for the long term".

YPO's Regional Education & and Social Responsibility Chairman -MENA, said: "the content of the
seminar was tailored for the main concerns of family businesses and provided the right solutions and
guidance for family businesses to secure a smooth transition between generations of leaders".

- Ends -

About INSEAD, The Business School for the World
As one of the world's leading and largest graduate business schools, INSEAD brings together people,
cultures and ideas from around the world to change lives and transform organisations. The unique
global perspective and multicultural diversity of INSEAD are reflected in all aspects of its research and
teaching. Currently, at the school's two comprehensive and fully connected campuses in Asia
(Singapore) and Europe (France), as well as at the school's centre in the Middle East (Abu Dhabi), 143
renowned faculty members from 32 countries inspire more than 882 MBA participants, 59 Executive
MBAs, 59 PhD candidates and over 8,000 executives. On both campuses and at research centres in the
Middle East (Abu Dhabi and Israel), faculty conduct leading edge research projects with the support of
17 Centres of Excellence. The INSEAD-Wharton Alliance further extends the reach of INSEAD business
education and research across three continents. More information on INSEAD can be found at
www.insead.edu.

About the INSEAD Centre for Executive Education and Research in Abu Dhabi:
The INSEAD centre for executive education and research in Abu Dhabi was established in September
2007 as the Middle East centre for the leading international Business school (with campuses in Europe
(France) and Asia (Singapore) to address the strategic business needs in the region. The Centre
provides open-enrollment and customized executive programs to government and non-government
organizations and businesses in the region, drawing on the long-standing and highly-sought after
INSEAD business knowledge and innovative tradition. The programme offering o includes inter alia
executive programs in leadership and strategy, entrepreneurship and family business, women and
leadership in the Middle East and healthcare management.

About JPMorgan Private Bank
For over 160 years, JPMorgan Private Bank has offered advice, customized solutions and client service
of the highest quality to solve the complex needs of wealthy individuals and their families around the
world. Our comprehensive range of capabilities encompasses investment, tax and estate planning,
family office management, philanthropy, credit and special advisory services. At JPMorgan Private
Bank we employ an integrated approach to growing and sustaining our clients' wealth, laying the
foundation for a relationship that will last though generations. We recognize that each of our clients is
different and we are exclusively focused on meeting their unique needs and helping them maximize their
potential.

Our multi-disciplinary teams are able to leverage the limitless resources of JPMorgan Chase & Co., a
leading global financial services firm with assets of US$1.6 trillion and presence in over 50 countries.

In everything that we do, excellence and integrity are our guiding principles. We believe that the unique
combination of our much-admired heritage, extensive footprint and strong team ethos will continue to
position JPMorgan Private Bank as the partner of choice for individuals and family businesses with
highly sophisticated needs. For more information, visit, www.jpmorgan.com/privatebank

About Young Presidents' Organization
Young Presidents' Organization, founded in 1950 in New York by manufacturer Ray Hickok, is the
premier international network of young global leaders, connecting more than 11,000 members in 202
local chapters in 100 nations to learn and exchange ideas to address the challenges young leaders face
today. All members of this worldwide, not-for-profit, executive education organization of peers are age
55 or younger. YPO was born with the express purpose to help build "Better Leaders Through
Education and Idea Exchange" among its' peer members and their families.

YPO's mission still resonates worldwide 57 years after it was founded, and the organization continues to
welcome new members and chapters from every corner of the world. For more information, visit
www.YPO.org.

								
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